“Have senior, seasoned impact players on the front line (who are experts doing what the client can’t do vs. what the client doesn’t have time to do) focused on deploying their creativity on ideas that drive client’s business. Be focused on value creation, embrace and use data and analytics to elevate work, and be collaborative.”  

–Tony Palmer, chief marketing officer of Kimberly-Clark quoted in Ad Age May, 2010

Actually, Mr. Palmer was referring to K/C’s relationship with its advertising agencies but the statement could easily apply to what a progressive research/insights team wants from its research partners (take a minute and reread it with that in mind).

At the annual ARF Rethink conference, Susan Wagner, Vice President, Global Strategic Insights, Johnson & Johnson Group of Consumer Companies called for this level of servicing and said she would pay more for it.  Stan Stanunathan, VP Marketing Strategy and Insights , The Coca-Cola Company said he would be interested in creating leveraged compensation models where the research agency gets a bonus for superior business outcomes (which is starting to happen with ad agency compensation approaches).

Could the evolution of advertising agencies provide footprints in the snow for the evolution of marketing research firms?  If so, let’s examine ad agency evolution.

About 15 years ago, at super-agency conglomerates like WPP, the media parts from the different agencies were consolidated while the creative agencies were kept distinct.  The reason this made sense, as Erwin Ephron explained to me, is that media buying is about scale much more than the creative side is.  One could imagine thinking that media was like the factory and the creative side was where catching lightening in a bottle happens.  So an advertiser might find a super-agency, rotate among the creative teams until they get what they are looking for, and keep the media buying consistent.

Now a funny thing happened in the advertising industry; I’m not sure that these two halves of the business evolved as anticipated.  Today, media agencies are not a commodity service; they have highly differentiated offerings based on buying power, approaches, tools, and ability to impact media strategy which is becoming increasingly central to brand strategy. Media agencies are often the lead agency, have created planner teams (like creative agencies) and are even building their own creative teams supposedly to communicate more seamlessly with the creative agencies chosen by the advertiser.  In other words, the media agencies have evolved such that they are also in the value creation business.

Here’s the analogy to super-research agencies.  Online panels…the “factory” that executes the research is built on scale like media buying and the research account teams offering strategic thinking and branded solutions …or should be…are analogous to the creative agencies (splicing in Tony’s quote)”…deploying their creativity on ideas that drive client’s business. Be focused on value creation, embrace and use data and analytics to elevate work, and be collaborative.”

In fact, the consolidation of online research “factories” is happening.  For example, Kantar has built and acquired research agencies accounting for billions of dollars of billings which are served by a consolidated online research panel, Lightspeed.  We also see the emergence of companies that are basically production companies like GMI and Peanut labs.

If the big research agencies were to split their businesses this way, I’d say that both pieces have impressive business opportunities.  The marketing research agency’s commercial model is still mostly based on running research projects or programs efficiently and then analyzing the results from those programs.  However, in the ARF Insights Value Creation Model, we see the opportunity for “synthesis” to add tremendous value.  Right now, I’d say that consultants, account planners, and buyer-side insights teams are much more in the “synthesis” business than research agency account teams, but if research agencies  cultivate new skills in their account teams and ratchet up their offerings they can compete by providing a whole new level of business impact. There an opportunity to create a new type of research and insights firm with a high level of expertise at finding the “so what”.

Panel operations “companies” would have three great opportunities.  Improve online research data trustworthiness, develop strategies for obtaining representative data from hard to research consumer groups, and offer effective and efficient access to these capabilities to the broad research community.

At the ARF Research Transformation initiative, research firms are having this much needed conversation collaboratively with their clients about the future of the research ecosystem.

“Inspiring better business futures, by enabling organizations to bring value to daily lives, through continuous learning, listening and translating people and markets.”

It’s about being an agent of change for the whole organization.  Inspiring better business futures is what we do.  Research and insights is just our fastball. As Donna Goldfarb from Unilever said when asked what her job is, “I sell soap”.

Then we heard a sobering factoid from McKinsey; 70% of all transformation efforts FAIL.

So, how do we make sure that our Research transformation initiative is a lasting metamorphosis rather than something that reverts back to old beliefs and ways of working?

One of the great insights from the meeting came from Guarav Bhatnagar, Assoc. Partner, McKinsey who said that most transformation initiatives are impelled by an “oh sh*t” motivation which, he notes, is not sustainable.  As soon as things start getting a little better, the sense of urgency diminishes to the point that the transformation mandate loses its steam.  So while this is a great way to create a call to action, a transformation must also find the “oh wow” for the whole organization.

The original motivator for the ARF research transformation initiative was from an ARF meeting in July 2008 about listening methods which quickly become a discussion about how the research function is not making the impact on organizations that it should be.  At that meeting, leaders said things like:

• “We have lost the capacity to listen for the unexpected”
• “Surveys are torture”
• And the famous Kim Dedeker (then at P&G) remark; “Research as we know it will be on life support by 2012’. 

Clearly, we had our “oh crap” call to action.  To make our transformation sustainable, we must find the “oh wow” and we need to find it for the organization, not just for the research profession to make our transformation sustainable.  Guarav also noted organizations don’t transform, unless people transform.

This perspective ties perfectly into the July 2009 ARF workshop where we thought of the research function as if it were a brand and sought to find a new brand narrative.  The thinking from the book Primal Branding (Pat Hanlon author) is that brands are belief systems.  For the brand “research”, those beliefs must become corporate culture, permeating the whole organization.

Brand narratives should be about the “oh wow” and changing the belief systems of people, meeting the McKinsey acid test for lasting transformations.  Here are selected passages from the Research brand narrative created at the ARF:

Before digital media and the long-tail of choices, things were different. ..Today, marketing organizations must commit top to bottom to becoming fast learning organizations and immediately sense seismic trembles in people’s needs, preferences, attitudes, changing behavioral patterns in social and media communities, and on and on.  Inspired by human insights, today’s business leaders must create their own future.

…In a great leap forward, the Research/Insights function serves as an agent of change for creating the fast-learning organization.  We bring the voice of the human into the boardroom. We use proven methods for surveys and for “listening” to social media, search, shopper databases, digital behaviors, customer care, continuous and other naturally occurring data.  We also take advantage of new methods such as biometrics, communities, virtual environments…to help us uncover the next marketplace move, even when consumers cannot yet articulate the changes themselves.

Then, we translate for the organization the meaning of what we are learning about human beings and markets into lucid foresight that tells us where to play–and where to win.  Research used to be about the what (data), then about the so what? (analysis). Today, we go to the now what? (strategy, action), and we find ourselves accountable for the business results of what we recommend. 

…Our team needs to continually retool, going beyond business metrics that merely quantify–and commit to listening for the unexpected (which is where change and innovation and leapfrogging your competition comes from). .. the enterprise must realize that funding consumer and market learning is a critical investment, not a discretionary expense. 

We need to create a new breed of “researcher”: inquisitive and courageous by nature, analytical by training. They are passionate about understanding consumers, translating insights into business opportunities, leveraging social sciences and analytic skills, and then using storytelling to communicate these insights in unforgettable ways.

Above all, they bring energy and insights into the boardroom.

While some decision makers may prefer to trust their own instinct, and some traditional researchers are more comfortable crunching numbers than “listening” to consumers, they are today’s minority and against great odds.  We must understand that the big innovative successes will always be driven by human and market insights and that this is the new path forward…

The rituals of how we work together are changing and must continue to change.  We are brought into big issues from the beginning, we help frame the challenges and opportunities, we take stands based from our perspective of human behavior…We build windows, not walls. We create sparks of insight … that light the way to growth. Forward.

Via The ARF Research Transformation Super Council, industry leadership will be creating the roadmap to this vision.

All layers of the wedding cake are needed to for research to have an impact on creating a better business future.  Check out what happens if any one of the layers is missing by viewing the short slideshow:

Of course, easier said than done!  What are the skills and mindset of the successful researcher of the future?  What are the tools that are needed in light of the new findings from anthropology, behavioral economics, and anthropology about how humans process information, recognize, and decide?  What are the processes and structure of the organization that has committed to a culture of bringing the voice of humans into every marketing decision?  What are the metrics of success? 

Led by some of the biggest global marketers, consultants, and research agencies, the ARF Research Transformation Super-Council is committed to developing the roadmap for how organizations can transform to this new model and culture.

For more on the ARF Research Transformation vision, click here to view the youtube video, “inspiring better brands”.

1. Mobile. Not mentioned in 1995 because it wasn’t thought of as an advertising or entertainment medium. Now mobile is at the top of everyone’s list to understand and measure better.

2. Set top box data. A compelling opportunity to get the granularity needed for media properties on the long-tail

3. Social media. Nuff said

4. The human. In 1995, we were focused on the consumer. As Stan Stanunathan from Coca-Cola says, when you focus on consumers you get incremental ideas. When you focus on humans you get breakthroughs.

5. Listening. Not a term the research community was using. Today it is central to generating future-focused insights and there were numerous presentations that leveraged the concept of listening.

6. Insights. In the 1995 brochure the word “insights” appeared only 4 times while the word “research” appeared 179 times. In 1995, we were still focused on the activities and craft of research.

7. Storytelling. This was the agency domain and only recently became a part of research impact

8. Sub-conscious mind. Especially on the biometrics panel, the idea that certain feelings, reactions, etc. are simply not accessible via the conscious mind. How do people make decisions? The model of the rational consumer has been forever overthrown.

9. Shopper. Shopper insights and shopper marketing are important parts of driving brand growth. They weren’t talked about at an advertising research event 15 years ago.

10. Long-tail. Amazon was just being founded in 1995 and before that, physical stores had limits to the choice they could offer. Unlimited choice via online retailers and media has created a level of market fragmentation never before seen.

11. Online research data quality. Online research didn’t really exist in 1995. Online research is such a dominant mode that the quality of the data must be beyond question.

12. We research. In 1995, each respondent was still a separate entity and not encouraged or even allowed to talk with anyone else. Now, firms are attempting to capture the dynamics of social interaction on individual choice in both quantitative research and communities.

13. Online and mobile video. Barely touched on in 1995 but now is a major force that every TV network needs to integrate into a 360 experience with their media properties. At first thought to be a threat to TV, now online and mobile video are thought to actually enhance engagement with the media property and increase TV viewing.

14. Multicultural is the new mainstream. We WERE talking in 1995 about how to conduct valid research among Hispanics but now it is mission critical. Non-Hispanic whites will be the minority in the US in 30 years and this has already happened in a number of major markets.

15. New business giants have emerged since 1995 that have changed the way people live their lives. The list includes: Google, Facebook, Twitter, My Space, LinkedIn, Flickr, Apple iTunes/iPhone/iPad/stores, Hulu, Youtube, Foursquare, Huffington Post, Techcrunch, Zappos, Fox News, Skype, Wikipedia, Firefox, DirecTV, Tivo, XM radio, NetFlix, Pandora.

Our lives are forever changed and are forever changing…truly there is a constantly changing new normal where the past is less and less predictive of the future. Marketers must use new approaches and adopt a new corporate culture to become fast-learning organizations, or they will find their opportunities in the new normal defined by a future that is not of their own making. Please take a minute to look at the video the ARF prepared, with the help of Thinktopia, entitled, “Inspiring Better Brands”.

I will then moderate a panel of other leaders, Gayle Fuguitt Vice President, Consumer Insights, General Mills;  John Forsyth Principal, McKinsey & Company, Inc.; and Susan Wagner VP, Strategy & Insights, Johnson & Johnson who will demonstrate that Stan is not alone; other leaders also believe the time is now.

Research transformation isn’t just about changing a department; it’s about being an agent of change for the culture and beliefs of the whole marketing organization:

1. Stop thinking of people as consumers and start thinking of them as humans.  The word “consumer” is marketing-ese for slicing off that part of daily living that relates to what you can sell someone and throwing away the rest.  That keeps you thinking in the box.  Stan from Coke says, “When you study consumers you get incremental ideas; when you study humans you get breakthroughs”.
2. Move from a control mentality to an influence approach.   Brand teams no longer control brand messaging thanks to the web-based social media infrastructure. Ask Motrin, or now Toyota.  Research departments no longer control the flow of information about consumers.  Marketing teams can search Twitter, or go to digital analytics, or…  Are you ready to do what Vitamin Water did, where they let their fan base in Facebook design the next new flavor?  Are you ready to let go?
3. Think of research as a source of anticipatory insights rather than just testing and measuring.  The risk reduction and measurement parts of what research does are important but those are downstream activities. The insights team needs to be thought of as an insights engine that builds strong brands and durable customer relationships.  We do more than quantify the expected; we also listen for the unexpected, bringing breakthrough ideas that inform strategy.  If the insights team is thought of this way it will be brought into to business issues at the start and regarded as an investment in the future of the business, rather than just an expense to be managed down over time.

What a different corporate environment!  Creating a fast learning organization where ideas can come from anywhere and where every test has a learning objective not just an action standard!  A way of working together where the insights team is integrated into business leadership teams, where we are part of and potentially lead the social media cross-functional teams, and where the voice of the human is brought by research into every marketing decision.

We are not just being quixotic about this.  The ARF is launching a Research Transformation Super-Council and along with those speaking on March 23^rd, we have leaders from great organizations like Unilever, Kraft, MTV, Cambridge, Cambiar, Colgate-Palmolive.  The super-council will have working committees to map out the transformation blueprint for organizational impact, creating insights-led strategies, and a working committee that will tackle engagement/talent/process.

This is our time, but with it comes the responsibility to up our game, to become leaders rather than just technicians and analysts, and to leverage what we know about humans (cognitive science, behavioral economics, anthropology) to bring insights that shape the strategic glide-path of the organization.

I hope to see you on March 23^rd at the ARF annual Re:Think conference, Succeeding in the New Normal for the start of this phase of our journey together.